Federal Reserve officials' concerns about inflation stoked by the Iran war intensified last month, with a growing number open to raising interest rates. This signals that incoming Chair Kevin Warsh will inherit an increasingly hawkish committee.
A majority at the April 28-29 meeting felt some policy firming would be appropriate if inflation stays above the 2% target, according to minutes released Wednesday.
Many participants preferred removing language suggesting an easing bias from the post-meeting statement.
In Fed's precise lexicon, 'many' falls short of a 'majority' but indicates support from non-voters for the three dissenting presidents.
Policymakers generally judged they would need to keep rates steady longer than anticipated. A vast majority noted increased risk that inflation would take longer to return to target.
While several policymakers felt a rate cut would be appropriate once inflation eases, that was fewer than in March.
'Building consensus to move rates in either direction will be difficult anytime soon,' said Ryan Sweet of Oxford Economics.
The divided meeting highlighted shifts in two blocs: a growing one wary of war-induced inflation and a diminishing one leaning toward rate cuts.
The main culprit was again inflation pressures aggravated by the U.S.-Israel-led war against Iran, which has driven up energy prices.
The Fed left its policy rate unchanged at 3.50%-3.75%, but four policymakers dissented, the most since 1992.
U.S. and global bond markets reflect conviction that the Fed will lift rates soon. The 2-year Treasury yield hit a 15-month high above 4.10%.
